Oak Harbor interim finance director, revenue projections raise concerns from City Council

A new, permanent, finance director will likely be selected in October.

Several Oak Harbor City Council members expressed concern about the city’s interim finance director and revenue projections in a post-pandemic world.

Mike Bailey has served as the city’s finance director since Patricia Soule’s departure last month. Bailey is a CPA with the Municipal Research and Services Center, a nonprofit that assists local governments that the city has on contract to the tune of $13,000 per month.

A new finance director is expected to be hired by the end of October.

Bailey has also acted as a consultant to the city in the finance department in addition to the director role.

Council members discussed extending Bailey’s contract as well as his consultation on an upgrade to the city’s payroll system and an update about the city’s lodging tax advisory committee, the latter of which drew more concern from council members.

Mayor Pro Tem Beth Munns questioned whether Bailey was carrying out his full duties, as “all he seems to be is consulting.” She asked Bailey if he went over action items with a “fine-toothed comb.”

Councilmember Joel Servatius also expressed concern about Bailey over the lack of communication about the lodging tax advisory committee, on which Servatius serves as chairman.

“I’ve asked three times over the past month for some communications and I’ve received zero communication,” Servatius said. “I have some grave concerns about continuing to spend the taxpayers’ dollars on an interim position when I don’t know what we’re getting for those dollars.”

Bailey said he believes he was acting in the role to the extent he could with a limited schedule, but said that, if the city council did not want his help anymore, that was “fine with me.”

Mayor Bob Severns spoke in defense of the interim director.

Severns said that he thought Bailey was “very involved in the day-to-day” actions of the department in finding a permanent director.

Severns proposed extending Bailey’s contract for two months, but when he asked for a motion, the meeting fell silent.

Councilmember Tara Hizon asked Bailey if he wanted to continue in the role. He answered that he was “glad to support the city and their work, but if that’s not something the city is interested in, I’m certainly content not to as well.”

Munns moved to extend Bailey’s contract by just one month “and see how things are going then.”

The motion was approved by the council, 4-2.

There was disagreement when council members discussed updates to the 2021 lodging tax fund.

The fund’s expenditures for 2020 were originally $342,000, but about $124,000 will remain unspent because of limits on events amid the COVID-19 pandemic. The unspent money was rolled forward to 2021. The city projects that revenues will return to “normal” in 2021, or similar to revenue received in 2019.

The fund’s anticipated revenue for this year is $146,353.

Some of the money projected to come in 2021 is already committed through multi-year grants. The city predicted 2021 revenue to be $275,000, so the city would have $321,116 leftover to give as grants after putting some money into reserves.

Annual grant awards would then be $78,000, according to city estimates.

Munns questioned whether the city’s estimates are accurate. She noted that 2019 was not a good year to base revenue predictions for 2021 and 2022 because it was a “bump year” for the city.

“I just don’t see, with schools not technically opened, and there are events in January already being canceled, how we think we’re going to to be that high in revenue,” she said, referencing the projected $275,000 in revenue for 2021.

Servatius asked why he was not included in the discussions that led to the night’s update.

Councilmember Jeff Mack echoed his concern, saying he thought Servatius should have been “kept in the loop.”

Severns responded that he was concerned about Servatius’s “possible conflict of interest” because he serves as president for the Oak Harbor Chamber of Commerce.

“I decided to ignore that, but I did have that concern about that,” Severns said. “I think the best answer is now we have these numbers available and intend to share just as much as we can.”

Servatius reminded the council that it needs to take action soon on what the awards will be so the process for the public to apply for them can move forward.

Councilmember Jim Woessner said that while he appreciates Servatius’ desire to keep the council on track with deciding a number for the fund, he doesn’t think that delaying the process would hurt the groups that use it.

“Speaking as one of the folks who is involved in a couple of these community events, I don’t know if we’re ready to submit a grant application yet because we don’t know what next year is going to look like, or even next spring,” Woessner said.

“If we were to delay this a little bit, I don’t know if it would be detrimental to grant recipients.”

Severns promised that Servatius would be included in future discussions about the lodging tax and that the team would bring more information in the future.

No other action was taken.

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